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European markets mixed ahead of U.S. inflation data; Philips down 10%

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LONDON — European stocks were muted on Wednesday as investors await the latest reading of U.S. inflation data.

The pan-European Stoxx 600 was 0.2% higher in early trade, with basic resources climbing 2.5% while health care stocks dropped 0.6%.

British advertising company S4 Capital was the standout performer in the Stoxx 600 on Wednesday morning, adding 5% to its share price after announcing that trading for the first 11 months of the year was well ahead of guidance. The company also agreed a deal to buy data analytics group 4 Mile Analytics.

At the bottom of the European blue chip index, Dutch health tech giant Philips plunged more than 10% after issuing a fourth-quarter profit warning following hits from parts shortages, increased provisions for device recalls and higher supply costs.

Global markets are awaiting the next reading of U.S. inflation on Wednesday to assess the economic picture in the world’s biggest economy and the Fed’s next move.

The consumer price index is expected to show inflation spiked in December, with economists predicting that prices rose 0.4% in December from the previous month, and 7% on a year-over-year basis, according to Dow Jones.

Fed Chairman Jerome Powell said on Tuesday that the economy is both healthy enough and in need of tighter monetary policy, which likely will entail rate hikes, tapering of asset purchases and a smaller balance sheet. He, however, did not announce an accelerated change in policy from what the central bank had already signaled.

U.S. stock futures held steady in overnight trading Tuesday after a rally on Wall Street as investors bought the dip following a five-day sell-off in the S&P 500.

Meanwhile, Chinese markets rose on Wednesday, tracking gains in other Asia-Pacific markets. Data released in Asia on Wednesday included China’s consumer and producer price index for December. The index was up 1.5% in December compared to a year ago, according to Reuters — a drop from the 2.3% increase in November and lower than the 1.8% rise expected in a Reuters poll.

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— CNBC’s Weizhen Tan and Yun Li contributed to this report.

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